Loan debt – PC Only Yazilim http://pconlyyazilim.com/ Fri, 05 Aug 2022 21:06:36 +0000 en-US hourly 1 https://wordpress.org/?v=5.9.3 https://pconlyyazilim.com/wp-content/uploads/2021/11/profile-120x120.png Loan debt – PC Only Yazilim http://pconlyyazilim.com/ 32 32 Do I need to take out a student loan to buy a new Prius? https://pconlyyazilim.com/do-i-need-to-take-out-a-student-loan-to-buy-a-new-prius/ Fri, 05 Aug 2022 21:06:36 +0000 https://pconlyyazilim.com/do-i-need-to-take-out-a-student-loan-to-buy-a-new-prius/ Dear Penny, Our Prius needs repairs. We trust our mechanic and the repairs are legitimate. It has over 170,000 miles and newer models get even better gas mileage. We currently have two cars, but since we mostly work from home, we don’t really need both. I thought we could consolidate and get a nicer Prius. […]]]>

Dear Penny,

Our Prius needs repairs. We trust our mechanic and the repairs are legitimate. It has over 170,000 miles and newer models get even better gas mileage. We currently have two cars, but since we mostly work from home, we don’t really need both. I thought we could consolidate and get a nicer Prius.

I was shocked to see that even a 2016 Prius costs around $18,000. The base model Prius Prime costs $28,500 and qualifies for a tax credit of $7,500. So $21,000 to buy a new Prius with electric capabilities, virtually zero miles and under warranty, with a negligible price difference over used hybrids.

In summary, once you factor in our trade-in values, your savings, and the tax credit, we would still need a loan of around $3,500. (I realize we’ll have to wait to get it back until we file our taxes.) I know it would be ideal to wait and save, but our Prius needs repairs now.

I am also an online student, but I pay for my studies with mainly grants and scholarships. Today I logged into my financial aid account to reject my student loan offers like I usually do and something caught my eye. It says the government pays the interest while you’re in school and for six months after. I have two years left. Basically, one could get an interest-free loan. I’m confident we could pay it off before the interest starts accumulating.

That sounds like a lot, but my inner frugality is anxious. Is it always a good idea to take out a loan? For reference, we are very responsible and have great credit as we always pay our bills and have a 100% success rate paying off loans early, even though we avoid them when we can. If it helps, it’s just me and my husband, and we don’t want kids.

-Thrifty student

Robin Hartil [ The Penny Hoarder ]

Dear Frugal,

I’m not of the school of thought that says all debt is terrible. Where it gets tricky is that you want to use a student loan to pay for the Prius. Student loans are based on your tuition fees.

The US Department of Education cost of attendance formula includes an allowance for books, supplies, transportation, and miscellaneous personal expenses. But the Federal Student Aid Handbook explicitly states that student loan money can be used for “the costs of operating and maintaining a vehicle used to transport the student to and from school, but not for transportation. ‘purchase of a vehicle’.

In your case, the use of student loan money for transportation costs is particularly murky. You’re an online student, so probably you’re not commuting to and from campus.

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There is, however, an obvious workaround. You can take out a student loan and use it to pay for eligible expenses, such as tuition and supplies not covered by your grants and scholarships, housing, and groceries. I’m guessing those costs will add up to over $3,500. Then you will free up money in your budget for car payment.

Realistically, you can’t determine whether you’re spending student loan funds or money from other sources of income once the student loan is deposited into your bank account – unless, of course, you open a separate account for student loan disbursements. But the fact is, as long as you don’t borrow more than your tuition, minus grants and scholarships, you shouldn’t be breaking any rules.

In the unlikely event that your scholarships and grants cover all of your tuition, you could still get a $3,500 personal loan. Since you have good credit and it’s a small amount, you wouldn’t pay too much interest.

If you’re sure you’re buying the Prius, don’t wait too long. Once a manufacturer sells 200,000 electric vehicles, credit eligibility begins to disappear. Toyota recently passed the 200,000 vehicle milestone, so barring any legislative changes, this $7,500 tax credit will be reduced to $3,750 on October 1.

Also keep in mind that EV tax credits are non-refundable, meaning the credit only applies to money you owe at tax time. For example, if you had an EV credit of $7,500 but only owed $2,000, you would clear the tax bill for $2,000 but not get a refund of $5,500.

It’s not just tax credits. You have clearly done the math and determined that this purchase makes sense. There’s no point investing money in repairs to a vehicle you’re planning to get rid of.

A loan is a bad idea when you use it to buy a lifestyle you can’t afford. But it is not the case here. As long as you don’t break the rules of the Ministry of Education, I see nothing wrong with taking on this small amount of debt.

• • •

Robin Hartill is a Certified Financial Planner and Senior Writer at The Penny Hoarder. Send your tricky money questions to AskPenny@thepennyhoarder.com.

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Whoopi Goldberg panics over student debt burden: ‘People can’t get gas, they can’t buy food’ https://pconlyyazilim.com/whoopi-goldberg-panics-over-student-debt-burden-people-cant-get-gas-they-cant-buy-food/ Tue, 02 Aug 2022 19:09:06 +0000 https://pconlyyazilim.com/whoopi-goldberg-panics-over-student-debt-burden-people-cant-get-gas-they-cant-buy-food/ NEWYou can now listen to Fox News articles! On Tuesday, hosts of ABC’s “The View” called for some form of student loan forgiveness, and co-host Whoopi Goldberg said the government should scrap student loan interest rates, criticizing the burden it places on Americans. Goldberg noted earlier in the segment a report from New York Magazine, […]]]>

NEWYou can now listen to Fox News articles!

On Tuesday, hosts of ABC’s “The View” called for some form of student loan forgiveness, and co-host Whoopi Goldberg said the government should scrap student loan interest rates, criticizing the burden it places on Americans.

Goldberg noted earlier in the segment a report from New York Magazine, which highlighted those who were still repaying their student loans “well before retirement age.”

“How is it possible that college can have such a high price tag? Because we’re always talking about looking out for older Americans. It affects Americans who have that student debt. It doesn’t matter what your background or what, you know, if you’re rich or if you’re poor. It doesn’t matter, if you have student debt, it goes with you to the grave,” she said.

Goldberg said a person should be born with the “gift of higher education” if they so choose.

Whoopi Goldberg calls for student loan forgiveness on “The View.”
(Screenshot/ABC/The View)

ON ‘THE VIEW,’ ALYSSA FARAH GRIFFIN REJECTS THE NOTION THAT SHE ‘DISN’T DESERVE A VOTE’ AFTER SERVING TRUMP’S ADMINISTRATOR

“These interest rates are worse than the bookmakers in my neighborhood. I mean, what is it?” said co-host Joy Behar. “You know, it’s really outrageous. I do believe though that if we’re not going to go with your plan, which is my favorite, everyone’s guaranteed, I think we have to target it a bit. Who’s going to get the loan and who’s going to pay it back? If you’re going to work for Doctors Without Borders, if you’re going to be a social worker or a teacher, or something like that, yes, then I’m happy for it. But I don’t think it’s generalized, frankly.

Goldberg later noted the case of an older woman who was still paying off her college debt and said it was shameful.

“In 1983, at age 52, Betty Ann enrolled in NYU law school. She borrowed $29,000 in federal loans. She now owes over $229,000. She’s 91, she sold the her family’s furniture to pay off her loan, wonders if without the debt she could have stayed in a house she once owned. Listen, it’s the debts you have to forgive. Because the people who are out there in the 70s and 80s maybe not making the same money they made in their 50s and 60s, you have to forgive that, it’s ridiculous,” she said.

"View" the hosts demand the cancellation of the student debt.

The hosts of “The View” are asking for the cancellation of student debt.
(Screenshot/ABC/The View)

‘THE VIEW’ HOSTS CLOSE CLAIM ‘THE RED WAVE IS COMING’: ‘YOU DON’T KNOW’

Co-host Sunny Hostin said Biden could forgive an additional $300 billion to $350 billion in student loans and that he has already forgiven $25 billion in student loans. Goldberg said seniors need their loans canceled.

“You talk, people can’t have gas, they can’t buy food, they can’t send their kids to any kind of college, it’s because they’re paying off these terrible debts. of students,” she said. “Just consider this, get rid of interest. Let people pay back what they borrowed and let us go from there.”

President Joe Biden, March 31, 2022.

President Joe Biden, March 31, 2022.
(Reuters/Kevin Lamarque/File Photo)

CLICK HERE TO GET THE FOX NEWS APP

The Washington Post editorial board said the president’s latest plan for student loans, which among other things seeks to forgive $10,000 per borrower, “would still be a costly and unfair blow to the election year.”

The federal pause on student loan repayments is set to expire at the end of August.

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Average Student Loan Debt for Black Millennials Nears $80,000 – Many Regret Not Pursuing Higher Paying Careers https://pconlyyazilim.com/average-student-loan-debt-for-black-millennials-nears-80000-many-regret-not-pursuing-higher-paying-careers/ Mon, 01 Aug 2022 19:34:31 +0000 https://pconlyyazilim.com/average-student-loan-debt-for-black-millennials-nears-80000-many-regret-not-pursuing-higher-paying-careers/ Student loans have been a constant difficulty for dozens of people. New research shows they continue to be a cash drain for black millennials. The average student loan amount for respondents was $79,535 compared to $126,993 for all respondents in the Real Estate Witch study. Of the 1,000 millennials surveyed, 15% or 150 respondents were […]]]>

Student loans have been a constant difficulty for dozens of people. New research shows they continue to be a cash drain for black millennials.

The average student loan amount for respondents was $79,535 compared to $126,993 for all respondents in the Real Estate Witch study. Of the 1,000 millennials surveyed, 15% or 150 respondents were black. This closely matches blacks who make up about 12-14% of the US population.

The data revealed that 57% of black people said they regret taking student loans and 60% of them said they did not know the interest rate on their student loans. About 35% of black millennials have student loans. And while white millennials may owe more, instead they often have more money to deny it.

Jamie Seale, the report’s author, says white millennials tend to have more assets, like a car or a home, to offset that debt. They are more likely to have better paying jobs, which makes it easier to pay off their debts. Consumers often go into debt to buy cars, appliances or tangible items that have value. But black millennials are more likely to borrow money for intangible things, like a medical emergency or their education.

“It leads to more financial insecurity because, in a pinch, they can’t necessarily sell their assets to pay off their debt. It’s risky when black millennials will have to rely on their future earnings to pay off their debts, but a college degree doesn’t guarantee a well-paying job.

Some 49% of black millennials surveyed identify as “low income” and earn $49,999 or less per year. Seale says that’s slightly below the $54,000 the average American worker earns.

“We don’t have data on what career fields black respondents wish they had pursued, but we do know that 27% of black respondents wish they had chosen a career with higher earning potential.”

With tens of thousands of dollars in debt, Seale says it’s hard to save for assets, like a down payment on a house.

“The most common financial regret among black millennials is not saving enough (41%), with black millennials having an average of $31,167 in savings, compared to $49,463 in savings among all respondents.”

The online survey paid for by Real Estate Witch included additional answers on debt, savings and other personal finance questions. Real Estate Witch is part of Clever Real Estate, an educational platform for buyers, sellers and investors. The overall analysis is here.

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New Zealanders Abroad Face Rising Student Debt https://pconlyyazilim.com/new-zealanders-abroad-face-rising-student-debt/ Sat, 30 Jul 2022 17:00:00 +0000 https://pconlyyazilim.com/new-zealanders-abroad-face-rising-student-debt/ According to Sam Blackmore, co-vice-president of the Union of Student Associations, the approximately 77,500 people abroad who are behind on student loan payments should be offered more incentives to return home. Delinquent debtors owed just under $1.9 billion in overdue repayments and penalty interest at the end of June, and Inland Revenue Te Tari Take […]]]>

According to Sam Blackmore, co-vice-president of the Union of Student Associations, the approximately 77,500 people abroad who are behind on student loan payments should be offered more incentives to return home.

Delinquent debtors owed just under $1.9 billion in overdue repayments and penalty interest at the end of June, and Inland Revenue Te Tari Take believes it knows where less than half is, according to data published under the Official Information Act.

But their debts are increasing as late payment interest is added at the rate of 6.8% on the unpaid portion of their loans, and the threat of arrest at the border remains in place.

“I don’t blame them for not coming back,” Blackmore said.

READ MORE:
* Student Loan Arrest: When Are Debtors Arrested and What Happens Next?
* Woman arrested at Auckland International Airport over student loan debt
* Inland Revenue loses track of thousands of Kiwi student loan debtors in Australia

With labor shortages in many industries, Blackmore said he wants the government to rethink its attitude towards failing overseas students.

“The stupid thing is that they cut off their noses to spite their faces,” he said.

“If we allowed these people to come back into the country, they would contribute to taxation, productivity and development.”

ROBERT KITCHIN/STUFF

Green Party Higher Education Spokesperson Chloe Swarbrick reveals the findings of the popular survey of student wellbeing to the media.

A package to encourage more people to return would include an agreement to clear their backlogs, he said.

“You agree to come back, you sign your form, you agree to work for five years, or whatever, and off you go,” Blackmore said.

Revenue Minister David Parker said the Inland Revenue (IR) Commissioner may already be offering relief to overseas-based borrowers, which could include waiving some or all of the added late payment interest to their loans.

Arrears have accumulated because people who go abroad with debt are obligated to make annual repayments, but must take active steps to make those payments.

People with student loans who stay in the country have their repayments automatically deducted from their salaries.

Just under three quarters of foreign student loan debtors are in arrears, information from StudyLink and IR.

While 10% of student loan debtors in New Zealand owe $50,000 or more, 20% of foreign borrowers owe that amount.

The 10 largest foreign student loan debtors owe an average of $474,000, an IR spokesperson said.

When people leave the country, they have a legal duty to keep IR informed of their contact details, but Parker said he was “aware that collecting student loans from borrowers overseas and maintaining contact with these borrowers are difficult”.

IR did not know the whereabouts of 43,071 foreign debtors with combined arrears of $1.13 billion.

Its records show that at least 29,366 borrowers in arrears were in Australia, with combined arrears of $610 million.

While penalty interest continued to mount, border arrests were rare and IR said only 13 people had been arrested for overdue student debts in the past eight years, with just one this year and two in each of the past two years.

IR was alerted when an overseas-based borrower returned to the country and attempted to contact them while they were there, Parker said.

Revenue Minister David Parker said people in student loan arrears can ask the Inland Revenue to waive some of their penalty interest.

ROBERT KITCHIN/Stuff

Revenue Minister David Parker said people in student loan arrears can ask the Inland Revenue to waive some of their penalty interest.

“Arrest is a measure of last resort and comes when returnees fail to engage with the department while they are here,” he said.

IR had to apply to the courts for an arrest warrant, and a border stop could only take place when he believed they were about to leave the country, he said.

Blackmore said the small number of arrests seemed to indicate a decision had been made not to arrest people at the border as it would create bad publicity.

The Inland Revenue knows of 1714 people in student loan arrears who live in the UK.  They have combined arrears of $40 million.

PA

The Inland Revenue knows of 1714 people in student loan arrears who live in the UK. They have combined arrears of $40 million.

Blackmore said he understands the forgiveness of loan arrears for returning debtors might not sit well with everyone.

“If we do any debt forgiveness, there will always be a disgruntled population, who will feel like they missed something,” he said.

He also called for new rules extending the time people with student loans could spend abroad without triggering overseas repayment obligations from 185 days to 12 months or even two years.

“We want people to be able to go out, learn, explore and come back,” Blackmore said.

IR planned to intensify its efforts to find debtors abroad.

“Additional work is also planned to locate debtors residing overseas, including those residing in Australia,” the spokesperson said.

He had an information-sharing memorandum of understanding with the Australian Revenue Authority to help find debtors there.

IR had also engaged collection agencies to trace overseas-based debtors and collect arrears.

“Interventions will range from locating customers and helping them get their repayments back on track, to more robust collections activities for those who continue to fail to meet their obligations,” he said.

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If Biden doesn’t cancel student loan debt, Congress should cancel interest https://pconlyyazilim.com/if-biden-doesnt-cancel-student-loan-debt-congress-should-cancel-interest/ Fri, 29 Jul 2022 14:30:00 +0000 https://pconlyyazilim.com/if-biden-doesnt-cancel-student-loan-debt-congress-should-cancel-interest/ Will he or won’t he? And how much? That’s what everyone asked about President Biden and canceling student debt. When news broke that the Biden administration was planning a $10,000 loan forgiveness, many argued it wouldn’t go far enough. Still, Biden said he doesn’t plan to cancel everything and wants Congress to tackle student debt […]]]>

Will he or won’t he? And how much? That’s what everyone asked about President Biden and canceling student debt. When news broke that the Biden administration was planning a $10,000 loan forgiveness, many argued it wouldn’t go far enough. Still, Biden said he doesn’t plan to cancel everything and wants Congress to tackle student debt through legislation.

A legislative proposal would temporarily allow those with student loans to refinance them at 0% interest. Congress shouldn’t just adopt this, it should expand it and make it permanent policy.

To make a difference in the college debt crisis, Congress should apply all interest payments already made to each borrower’s principal, fix public loans at a permanent interest rate of 0% in the future, and allow those with private loans to convert their debt into public loans, also at 0% interest.

Our research suggests that eliminating interest would allow those who graduate from college on student loans to contribute more fully to the economy, achieve financial stability and security, raise families, and live fuller and happier. Removing interest would mean that people would continue to repay the loans they borrowed, without the government or private companies benefiting.

For many, the interest on their debt creates a situation that looks like quicksand. Often the payments don’t even cover the interest, so when people pay off their loans, they see their balance increase.

Setting interest rates at 0% for all public student loans, waiving interest, and applying past interest payments to principal would allow people to pay down their debt. Biden’s $10,000 loan forgiveness would certainly help some of those borrowers as well, but it wouldn’t solve the problem of compound interest on remaining student debt for everyone.

Then there are the 13% of borrowers who use loans from a private source. Over the past six years, one participant in our research study has paid approximately $1,200 per month on his $105,000 private loan, a total of over $86,000 so far. High interest rates mean they still owe $78,000. Private loan holders should be able to refinance their loans under a zero-interest public loan program. Then, when they make payments, they will see their balances decrease significantly.

Applying all past interest paid to the principal would mean instant loan forgiveness for those who have already repaid far more than they ever borrowed. It would also allow anyone balking at the notion of loan forgiveness to see that many who have loans have paid them back – and more.

We’ve been studying college graduates’ experiences with loans for more than six years, and this kind of cancellation would be a game-changer for them. In the spring of 2016, we interviewed a small number of graduating seniors with loans, and we’ve re-interviewed them almost every year since, following them as they faced student loan repayments, life changes, and more. jobs, to live with their parents to make ends meet, and serious health problems.

We also surveyed a larger group of students and graduates and asked them what they would do if their student loans were forgiven. Most told us they would save and invest for the future, buy homes, and pay off medical and credit card debt. Some would marry or have children. In recent interviews, we’ve seen how the pause in student loan repayments has finally helped borrowers achieve some of these goals.

One woman in our study, now in her late 40s, started college at age 18, but was only able to return to complete her education when she was older. Her monthly loan payment of nearly $700 never seemed to make a dent in what she owed, but paying it meant she and her husband couldn’t cover all of their expenses, even though they were all working. both full-time for decades. Overdue bills, borrowing from retirement savings, and mounting credit card debt just looked like it always would. It was not until after the federal student loan hiatus began that she was able to pay off her other debts; she is now up to date with her bills.

But when debt payments resume in just over a month, many young adults in debt will once again fall behind on other payments or have to postpone important milestones, such as buying a home or getting married. , preventing them from fully enjoying the adulthood they thought they would improve by pursuing a college education.

The people we have been following for several years understand that they chose borrow money to pay for his studies. But they did not make this choice lightly. They followed widespread advice to pursue higher education to position themselves for higher-paying jobs. None of them were wealthy and most were first generation students. So they took out loans – often for much larger amounts than previous borrowers needed.

Indeed, tuition fees have risen dramatically and the burden of paying for higher education has weighed more heavily on individuals and their families as state funding has stagnated. Post-Great Recession cuts have made matters worse, and budget issues due to COVID-19 will likely lead to further tuition increases in years to come. It used to be that college aid came more in the form of grants, but today most people have to fund their college education through loans.

Something must be done to reduce the cost of higher education. Something must also be done to address the current student debt problem of over $1.75 trillion. The elimination of interest would be a significant step in the right direction.

Our research has clearly shown that canceling student debt – in whole or in part – would have positive effects on individual borrowers, their families, and the economy. Achieving the “American Dream” of earning a college degree cannot come at the expense of family and financial security; otherwise, the dream remains out of reach.

If loans are still necessary for some to get a college degree, removing interest would at least make student debt less insurmountable and less predatory, and allow millions of young adults to begin making meaningful strides toward future stability.

Joan Maya Mazelis is Associate Professor of Sociology and Director of Gender Studies at Rutgers University-Camden. Am here @JoanieMazelis. Arielle Kuperberg is associate professor of sociology and women’s, gender, and sexuality studies at UNC Greensboro and president of the Council on Contemporary Families. Am here @ATKuperberg.

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$55 million in student debt relief on the way for Pennsylvania nurses https://pconlyyazilim.com/55-million-in-student-debt-relief-on-the-way-for-pennsylvania-nurses/ Wed, 27 Jul 2022 09:20:00 +0000 https://pconlyyazilim.com/55-million-in-student-debt-relief-on-the-way-for-pennsylvania-nurses/ Nurses in Pennsylvania will begin receiving notifications next week about whether they are eligible for a share of the $55 million the state is making available to reduce or erase their student loan debt. The money for the Pa. Student Loan Relief for Nurses Program comes from the state’s share of Federal American Rescue Plan […]]]>

Nurses in Pennsylvania will begin receiving notifications next week about whether they are eligible for a share of the $55 million the state is making available to reduce or erase their student loan debt.

The money for the Pa. Student Loan Relief for Nurses Program comes from the state’s share of Federal American Rescue Plan funds. This one-time offer will relieve certain state-registered nurses who cared for patients during the COVID-19 pandemic at a Pennsylvania healthcare facility from up to $7,500 in student loan debt.

“Pennsylvania’s healthcare workforce has been overworked and understaffed for years, creating recruitment and retention issues for medical facilities and quality-of-care issues for patients,” said Senator Maria Collett, of the D-Montgomery County, in an email. Collett, a nurse, pitched the idea of ​​nursing loan relief to Governor Tom Wolf last year.

“The program was designed to provide a much-needed boost to nurses who have been on the front lines of the COVID-19 pandemic and help Pennsylvania retain and rebuild its nursing workforce,” it said. she declared.

Nearly 24,000 nurses applied for this loan forgiveness program as the application window closed, according to a spokesperson for the Pennsylvania Higher Education Assistance Agency, which operates the program. This number far exceeded the fund’s ability to provide maximum debt relief to all who requested it.

Accordingly, the agency has designed a selection method to ensure an equitable distribution of funds by geographic region based on the percentage of eligible applicants from each region. It will then randomly select winners from each region.

Once the selections are made, PHEAA spokesman Keith New said the agency will notify the winners and begin the process of verifying their employment. The plan is for the first payments to go directly to the student loan department of nurses selected in August, he said.

This loan forgiveness program was first announced last fall when Governor Tom Wolf made $5 million in federal COVID-19 recovery assistance available. The General Assembly, seeing the high level of interest from nurses soon after the application window opened, passed legislation in January to increase federal funds for the program by $15 million.

The 2022-23 budget agreement passed earlier this month injected an additional $35 million of federal COVID-19 recovery assistance into this program. Collett said she had fought to increase the pot of money in hopes of allowing “more deserving nurses to benefit from it”.

The program, which pays up to $2,500 per year for up to three years, is limited to registered nurses, licensed practical nurses, certified registered nurse practitioners, clinical nurse specialists and certified nurse midwives who have started to work by December 31, 2021, at a Pennsylvania facility that provides nursing care directly to patients.

Given the programme’s popularity, Collett said she hopes it “could serve as a model for other areas facing staffing shortages across the Commonwealth”.

Jan Murphy can be reached at jmurphy@pennlive.com. Follow her on Twitter at @JanMurphy

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Student loan debt is another challenge for first-time homebuyers https://pconlyyazilim.com/student-loan-debt-is-another-challenge-for-first-time-homebuyers/ Sun, 24 Jul 2022 03:00:51 +0000 https://pconlyyazilim.com/student-loan-debt-is-another-challenge-for-first-time-homebuyers/ TEXARKANA — Local mortgage experts say student loan debt is making it harder for young buyers to find good deals in the Texarkana area. With steadily rising mortgage rates, low housing inventory, and high-priced homes already plaguing the market, student loan debt adds to an already long list of hurdles for those trying to purchase […]]]>

TEXARKANA — Local mortgage experts say student loan debt is making it harder for young buyers to find good deals in the Texarkana area.

With steadily rising mortgage rates, low housing inventory, and high-priced homes already plaguing the market, student loan debt adds to an already long list of hurdles for those trying to purchase their home. first house.

Jay Davis, vice president of State Bank and a member of the Texarkana, Texas, city council, said there are three main ways first-time home buyers are affected by student loan debt: It limits the purchasing power, limits the number of homes in their price range and prevents them from qualifying to buy a home.

According to the Federal Reserve, nationally, the average person with federal student loan debt has about $37,000 in debt. The Texas A&M University’s Texas Real Estate Research Center reports that student loan debt can eat up between 3.3% and 10.9% of the average income of a Texas college graduate, making it more difficult to get a job. a home loan or savings for a down payment.

Davis said lenders are required to include a 1% debt payment in calculating a buyer’s monthly debt-to-income ratio, which can reduce a person’s purchasing power by up to 46,000. $.

“In the Texarkana area, we have 98 homes listed under $200,000. If you take that $46,000 buying power off and you take the number of homes listed at $154,000, that reduces the number of houses they could be entitled to 58. That’s 40 houses less,” Davis said.

On average, a household earning $50,000 may need just over two years to save the down payment on a $217,000 home, according to the Texas Real Estate Research Center. However, this rises to six years if the household supports the average student loan payment.

In a 2021 survey by the National Association of Realtors, 60% of non-homeowner millennials (ages 26-41) cited student loan debt as a barrier to buying a home. Two-fifths of millennial homeowners said student loan debt delayed their home purchase by at least three years.

Debra Moore, senior vice president of Commercial National Bank, said about 15 to 20 percent of first-time home buyers she sees trying to get a home loan are dealing with student debt.

She said many first-time buyers don’t know that additional debt should be included in the debt-to-equity ratio, even if it’s deferred.

“Unfortunately, many homebuyers don’t know what their required payment is once it comes off the deferral, so we have to count 1% of the balance toward the debt-to-equity ratio,” Moore said. “Usually the required payment is lower. So if the home buyer got the required payment amount, it would usually be lower. So we ask them to try to find out what it would be, even if it’s in deferred.”

Davis said most loan programs require the debt-to-income ratio to be below 45%.

“That’s going to come into play whether someone qualifies or not, with that student loan debt.”

Davis said the cost of attending a four-year local institution option like TAMUT is quite low, which reduces some of the student debt for those who stay home and go to school. . The cost of participating in TAMUT is about $18,000 per year, Davis said.

“You envision being able to graduate from A&M-Texarkana for less than $75,000. And that’s if you didn’t qualify for scholarships or something. I think TAMUT did a great job of keep costs as low as they can for local students. Texarkana College has also done a phenomenal job,” he said.

As the pause on federal student loans ends Aug. 31, Davis said her best advice to a first-time homebuyer with student loan debt would be to contact a mortgage expert and allow them to explain the process.

“There’s so much misinformation on the internet, and there’s so much misinformation, even word of mouth, that a lot of first-time home buyers or college graduates don’t even look to see if they qualify. And each person is going to have to figure out if it’s the right time for them to rent or buy a house,” he said.

He gave some advice to people who are about to have to start paying off their student loans:

• Contact your student loan officer to ensure they have your up-to-date contact information

• Make sure your debit/credit card has not expired on your account

• Consider repayment or consolidation options

Moore also recommended consolidation options.

“That’s usually what a lot of those with student debt have managed to do to reduce that payment,” she said.

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Student Loan Debt Cancellation Decision Coming End of August https://pconlyyazilim.com/student-loan-debt-cancellation-decision-coming-end-of-august/ Fri, 22 Jul 2022 15:50:53 +0000 https://pconlyyazilim.com/student-loan-debt-cancellation-decision-coming-end-of-august/ President Joe Biden provided an update on the progress of large-scale student debt cancellation plans. Finally, after several weeks of no movement – or at least no public movement – on his plans to fulfill his campaign promise to forgive $10,000 in federal student loan debt, it looks like there will be an answer as […]]]>

President Joe Biden provided an update on the progress of large-scale student debt cancellation plans. Finally, after several weeks of no movement – or at least no public movement – on his plans to fulfill his campaign promise to forgive $10,000 in federal student loan debt, it looks like there will be an answer as to what he will do, exactly, and how he will do it, soon.

According Forbes, on July 20, a reporter asked Biden when a decision on debt cancellation would be made. Biden replied, “By the end of August.”

It has been several weeks since the administration last updated on Biden’s campaign promise to forgive student loan debt.

At that time, Biden planned to place an income cap on who might be eligible for student loan forgiveness. Reports say the plan would likely include $10,000 in relief for federal borrowers and the rebate would be limited to people who earned less than $150,000 in the previous year for single filers or less than $300,000 for couples filing jointly.

Supporters warn that the proposed cancellation of $10,000 will not be enough. While this would completely cancel the debt of about a third of borrowers, it would leave far more in debt than they already could not repay before the extended pandemic payment pause.

Debt Collective – the nation’s leading debtors’ union – has expressed its position on the proposed plan, saying $10,000 per person is nowhere near enough.

Other experts say another effective way to reduce the financial burden of student debt in the future would be to eliminate interest on student debt, according to Bloomberg. Experts argue that eliminating interest would likely save each borrower more than the proposed $10,000 in the long run.

The pandemic interest freeze on loans held by the federal government is due to expire on August 31, so the pressure to announce a more permanent solution is mounting.

As of June 2022, 45 million Americans held student debt totaling $1.75 trillion, an average of $28,950 in debt held per borrower. Polls show that most millennials support significant debt forgiveness for federally held student loans.

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A young lawyer has $347,000 in student loan debt, has no job and lives on welfare https://pconlyyazilim.com/a-young-lawyer-has-347000-in-student-loan-debt-has-no-job-and-lives-on-welfare/ Wed, 20 Jul 2022 17:44:34 +0000 https://pconlyyazilim.com/a-young-lawyer-has-347000-in-student-loan-debt-has-no-job-and-lives-on-welfare/ Much has been made of the Great Resignation, where employees now have more leverage when it comes to getting jobs and negotiating salaries due to a labor shortage. But not everyone has benefited, and a young lawyer struggles with what appears to be unfathomable debt. Business Insider featured Steve, a 2017 graduate of Seattle University […]]]>

Much has been made of the Great Resignation, where employees now have more leverage when it comes to getting jobs and negotiating salaries due to a labor shortage. But not everyone has benefited, and a young lawyer struggles with what appears to be unfathomable debt.

Business Insider featured Steve, a 2017 graduate of Seattle University School of Law. Steve grew up in a working family and became a social worker after graduating from college. He said he was often told by lawyers and those around him that pursuing a law degree would leave him well.

So he went to law school and took out student loans to cover the full tuition, thinking he would get a job after graduating and earn enough money to pay off the full loans. . Some of his loans were Grad PLUS loans, which have the highest interest rate at 7.54%.

But life gave Steve a hard time. His fiancee had medical issues that prevented her from working and forced Steve to delay the bar exam. They left Seattle to move to Nebraska to live temporarily with their family, then moved to Albuquerque, New Mexico, where they now live. They receive government assistance in the form of rental assistance and the Supplemental Nutrition Assistance Program.

Steve has not been able to secure a steady income and has no monthly student loan repayments under his Income Contingent Repayment (IBR) plan. Accrued interest is frozen until August 31, when the moratorium on loan repayments is expected to end, unless there is another extension.

Steve’s situation should sound familiar to most young lawyers. He got optimistic advice about law school from people who probably didn’t know any better and from lawyers who should have known better. And he funded his entire legal education in hopes of finding a job after graduation. He couldn’t find a job after graduation due to his unhappy situation and his alma mater’s career service couldn’t help him because they probably don’t have many connections. with the elders in Albuquerque.

And now he has nearly $350,000 in non-dischargeable student loans, more than the average cost of a home in Albuquerque. Moreover, assuming an average interest rate of 6%, his loans will earn $20,000 in interest per year. So unless he can afford to pay a minimum of $1,735 per month just to cover accrued interest, his loan balance will continue to grow and he will eventually become an IBR lifer.

Unfortunately, his large debt is not surprising because there are many like him. Looking at the average cost of law school and rent in big cities like Seattle, full-time students will need to borrow at least $80,000 a year to cover costs. After three years, the law school debt can exceed $250,000. And assuming there is an additional undergraduate debt of $50,000, the total debt may be $300,000.

And will people like Steve get some form of loan forgiveness? The government doesn’t seem sympathetic to lawyers because it thinks all lawyers earn obscene salaries. But even if he does, his IBR status and accrued interest could negate the benefit. For example, if $10,000 of his loans were canceled as proposed by President Joe Biden, it won’t change anything for him. His IBR payment is already zero, so the partial loan forgiveness will not affect his loan repayments. Plus, his accrued interest will likely eat into savings within a year or two.

Steve went to law school so he wouldn’t have to worry about putting food on the table. Now he lives on food stamps and his career prospects are uncertain. While I hope his situation improves, he may have to become a “criminal” lawyer or manufacture and sell meth on the side to make ends meet. So for those entering law school this fall but hesitant to demand tuition cuts, read his story because chances are you’ll find yourself in the same predicament if you don’t do everything your best to minimize costs. And if the current inflation trend continues, you could walk away with $350,000 or $400,000 in debt. Law schools don’t owe you better grades just because you paid the full tuition.


Steven Chung is a tax attorney in Los Angeles, California. He helps people with basic tax planning and resolves tax disputes. He is also sympathetic to people who have large student loans. He can be contacted by email at stevenchungatl@gmail.com. Or you can connect with him on Twitter (@stevenchung) and connect with him on LinkedIn.

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Loan Debt Harms the Mental Health of Black Borrowers https://pconlyyazilim.com/loan-debt-harms-the-mental-health-of-black-borrowers/ Tue, 19 Jul 2022 07:08:56 +0000 https://pconlyyazilim.com/loan-debt-harms-the-mental-health-of-black-borrowers/ A new piece of research, released today, found that student loan debt impacts the mental health of black student borrowers. The memoir, published by the Education Trust, is the second in a four-part series based on the National Black Student Debt Study, a survey of nearly 1,300 black borrowers and 100 in-depth interviews. It revealed […]]]>

A new piece of research, released today, found that student loan debt impacts the mental health of black student borrowers.

The memoir, published by the Education Trust, is the second in a four-part series based on the National Black Student Debt Study, a survey of nearly 1,300 black borrowers and 100 in-depth interviews. It revealed that 64% of respondents said student debt had harmed their mental health. Even among students enrolled in income-driven repayment plans, the majority said loans were their “main source of financial stress” and had negative effects on mental health.

The memoir shares accounts of black borrowers who said in interviews that student loan debt had driven some of them to depression, stress, anxiety and suicidal ideation.

A borrower named Yvonne said defaulting on her loans and having her wages garnished made her depressed. She borrowed $58,000.

“It was a very dark time in my life,” she said. “I felt like I wasn’t fully supporting my family because I wasn’t getting a full paycheck. But, again, it was because of my own decision. So for me it was a double edged sword. I became depressed. And I’m a very transparent person. I drank more then, I will honestly say. And I didn’t know where to go. I didn’t know who to talk to. I didn’t know how to fix it. »

The brief recommends forgiving at least $50,000 of federal student debt, regardless of income, loan type, or degree level. (Eighty percent of study participants recommended the federal government cancel all student debt.) It also suggests doubling the Pell Grant, making public colleges free through partnerships between the federal government and states and reform income-based loan repayment plans.

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